AHDB Pork Weekly Export Bulletin

BPEX Export Bulletin - Week 5

On Friday, 27 January, in London and on 30 January in Prague, Defra launched its new initiative "Driving Export Growth in the Farming, Food and Drink Sector: a Plan of Action".

Alongside BPEX, other sponsors include UKTI, Food & Drink Federation, the Scotch Whisky Association, UK Food & Drink Exporters’ Association and AHDB including EBLEX. Needless to say, we are closely associated with the two later bodies and have been involved in the formulation of the new policy. This important plan for UK food exports can be seen at www.defra.gov.uk/food-farm/food. This new initiative signals the return of food exports to a more important role after many years in the political wilderness.

Denmark

Market

On the European market fresh legs are sold at increasing prices. Loins are still under pressure whereas other cuts are sold at fairly unchanged prices. Exports to the British bacon market are slow as well. In particular, loins are under pressure. As to markets outside the EU the situation remains unchanged, meaning slow exports to Russia and stable exports to the markets in the Far East.
(Sources, Danish Crown, Tican, Danish Agriculture and Food Council)

Large Danish pig production abroad

Danish farmers have established so many pig stables outside Denmark that it corresponds to 10% of the Danish pig production. Hereby Danish farmers and investors through small or large investments have established large production installations, which annually, based on 100,000 sows, deliver approximately 2.5 million pigs for slaughter. The number is so high that it corresponds to a larger production than the one that the slaughterhouse Tican handles every year. The figures are estimates prepared by the network Danish Farmers Abroad, which organises conferences and experience exchange groups for Danish farmers abroad. According to Danish Farmers Abroad Danish farmers cultivate as much as 350,000 hectares of crops abroad corresponding to 14% of the total production of plants in Denmark. The figures are a fine indication of Danish investments. However, as they are just prepared among the members of the network the figure might actually be higher. The investments are mainly placed in East Europe, but Danish farmers have established pig production in North America and in China as well.
(Source, Landbrugsavisen)

Discussion on the use of conventional soy beans

Currently Danish Crown is considering whether to introduce a new soy bean policy. The debate on soy beans really gained momentum last year when it appeared from various scientific reports that children in Argentina get cancer and are born with deformities due to extensive use of pesticides in the cultivation of soy beans. The debate resulted in several sectors of Danish farming gathering to discuss how to ensure a sustainable soy bean supply to Danish animals. Several organisations and politicians criticised the farming industry for not doing anything to solve the problem. However, Danish Crown says that recently there was a meeting with WWF in order to consider the options. The slaughterhouse company is considering if it will be possible to introduce a general rescheduling or a proposal, where e.g. a group of particular producers will use sustainable soy beans as feed. Danish Crown says that it is important to find a common European solution to increase the market for certified sustainable soy beans.
(Source, Landbrugsavisen)

Danish slaughterhouses - payments week commencing 30 January 2012

Slaughterhouse

Danish Crown

Tican

Slaughter pigs (70.0-86.9kg)
Difference to last week

Euro 1.320
Unchanged

Euro 1.320
Unchanged

Sows (above 129.9kg)
Difference to last week

Euro 0,906
-0.040

Euro 0,906
-0.040

Boars (above 109.9kg)
Difference to last week

Euro 0.773
-0.040

Euro 0.773
-0.040

France

44th porcine research days

As every year, IFIP and INRA are co-organising the above event at Espace Reuilly in Paris on 7 and 8 February. This year main themes include: genetics and quality of products, animal health, environment, feeding, economics and sociology, animal welfare, breeding and herd management. Any further information available on Tel 00 33 1 40 04 43 72

€1.4/kg

This is the objective in terms of price for 2012 set up by the regional pig committee and recommended to the industry. In 2011, in spite of a 14% rise for pig prices, the increase of 34% of feed was too much to maintain a balanced income for producers. In average, last year a pig producer in Britanny lost €25 000...

Pork

France confirmed its market increase yesterday in Plérin. Our basic price gained 1 cent, in two consecutive sessions the price increased by 6 cents, that is the maximum allowed in the "Marche du porc Breton" between Thursday and Monday. Due to our exports, fluidity is still the word.

Piglets

Our internal market is the same as that of our neighbours: limited offers, stable demand and prices stable or a little higher. The FNP-FNCBV prices ended last week, they are slowing down. There is status quo for 25 kg and only -7cents for the post weaners.

Cuts

The French market is very calm. Nevertheless, prices recover. We are still waiting for the restocking of the retailers during the beginning of the month.

Pork prices RUNGIS week commencing 23 January 2012

Cut name

Price range (Euro/kg)

Back fat, rind-on

0.75

Trimmings

1.34

Leg

1.94

Loin including chump

2.87

Loin excluding chump

2.41

Belly extra without trimmings

2.47

Germany

Market

The market for pig meat is described to be subdued. While some traders experience hams to be marketed with difficulties only, others struggle to sell chops, loins or collars. Margins remain below expectations. The same situation applies to sow meat where the trade is also sluggish.
(Source, AMI)

Clemens Tönnies’ interview

In a hard-hitting interview for Wirtschafts Woche, the boss and owner of the largest European pork processor (15.5 m. pigs, 4.3 bn. turnover, 7,600 employees) gives some insights on his business.

The company will drive animal welfare despite on-costs estimated at € 20.00 per pig in the long term.

Tönnies will intensify the dialogue with critics. The example was the recent Berlin conference on pig welfare (snubbed by Vion and Westfleisch).

Despite not being able to buy Tummel, Tönnies remains acquisitive.

The recent Chinese joint venture is a very important step for Tönnies. The partner is investing € 60-70 m. and Tönnies is building a new packing and freezing plant to supply the Chinese market.

Clemens Tönnies’ other major interest (not withstanding his 85% shareholding of the Zur Mühlen group) is the major Bundesliga football club Schalke 04. He reports falling debts, break-even profits and interest from Russian energy company Gazprom.

The article also mentions Tönnies’ Rheda plant EC number 202 as the single biggest pork brand in China. This may be debatable but even if it is not the case, it is not far from the truth.
(Source, Wirtschafts Woche)

New logistics centre

Metro Cash & Carry Germany has put into operation a new logistics centre for meat. From the new centre based in Groß-Gerau near Frankfurt some 300 t of meat will be distributed weekly to the 107 sites of the two sales brands Metro Cash & Carry and C+C Schaper. The logistic centre was built to save money- and time consuming intermediate stages. Further, the meat range sold at C+C Schaper will now be able to be extended. 30 employees are working at the centre. The construction of the 5.000 sqm large site took nine months. Groß-Gerau is conveniently located in close proximity to Frankfurt airport in the middle of the country from where all sites of the company can be reached within six hours. Energy for the warehouse vehicles is generated through a wind turbine on site.
(Source, Lebensmittel Praxis)

Pork Prices Hamburg Market week commencing 30 January 2012

Cut Name

Price range (€/kg)

Round cut leg

2.10/2.30

Leg (boneless, rindless max fat level 3mm)

2.95/3.20

Boneless Shoulder

2.35/2.50

Picnic Shoulder

2.00/2.15

Collar

2.30/2.55

Belly (bone in, ex-breast)

2.20/2.40

Sheet Boned Belly (rindless)

1.90/2.25

Jowl

1.30/1.50

Half Pig Carcasses U class.

2.02/2.12

Netherlands

Family Farmers bankrupt

The co-operative had 13,000 sows under contract and more than 20,000 in 2009 but has debts of € 4.5 m. It owes money to feed companies and some producers.
(Source, Boerderij Vandaag)

Topigs new Piétrain

The breeder has introduced the new line for semen Top Pie in Holland and SNW – Piétrain – Select in Germany with 40% less chance of boar taint under the "Nador" DNA concept. The concept was tested on 27,000 boars.
(Source, Boerderij Vandaag)

Merger for AI centres?

The fall of 6,100 sow farms in 2000 to 2,687 in 2010 means that fewer AI centres are needed reports Boerderij Vandaag. For example, Varkens KI the largest AI centres saw its volume fall 7% to 3.6 m. doses in 2011. Smaller AI centres like Klasse KI (497,000 doses) and Twente KI (331,000 doses) have a fight on their hand to keep competing but there is no talk of merger.

Spain

Large investment from Carnicas Celra

The company based in Girona is increasing its pork cutting capacity from the current 50,000 tonnes to a potential 120,000 tonnes and will create 200 new jobs. Some 80% of the production is exported.

Dehesa de Guijuelo completes its investment

The fast-growing company has now a curing capacity of 900,000 pieces per year and drying space for 1.5 million pieces.

Pork prices in Barcelona Market Week commencing 30 January 2012

Cut Name

Price range (€/kg)

Carcasses (secondary grade)

1,483/1,489

Gerona Loin Chops

2,21/2,24

Loin Eye Muscle

3,11/3,14

Spare Ribs

2,73/2,76

Fillets

5,38/5,41

Round Cut Legs

2,28/2,31

Cooked Ham

1,82/1,85

Rindless Picnic Shoulder

1,54/1,57

Belly

1,96/1,99

Smoked Belly with Spare Rib Section Cut off

2,39/2,42

Shoulder chap or Head Jowls

1,08/1,11

Back Fat, rindless

1,08/1,11

Italy

Poor economic prospects

The eerily empty restaurants in Milan do not lie. The economic crisis is deeply affecting Italian consumption. Following anaemic growth for the last few years, the country expects of recession for 2012 which will cut GDP by 2.2%. Other poorly performing economies in 2012 will include Greece (-5%), Portugal (-3.1%), Spain (-1.7%) and Slovenia (-1.1%). The economy of non-Eurozone countries will stagnate too with the GDP of Hungary expected to shrink by 1.5%.
(Source, various)

Ireland

Positive forecasts

Teagasc the agriculture research organisation is predicting good profitability in 2012 for Irish pig farmers on the basis of a fall of 10% of feed prices from the € 296 /tonne paid in December. Low supplies and strong exports should support pork prices.
(Source, Irish Farmers’ Journal)

Russia

Measures taken to fight ASF in Kuban

In the beginning of January there were several ASF outbreaks in Kuban (Krasnodarskiy Kray, Stavropolsky Kray, Rostov oblast) resulting in the death/slaughter of more than 40,000 pigs. An urgent meeting was held by the deputy director of Rosselkhoznadzor Yevgeniy Nepoklonov and the governor of the oblast Alksandr Tkachov in order to discuss the urgent measures that are to be taken to fight ASF and to protect pig farms. Representatives of 87 pig complexes and farms in the region were also invited to the meeting to get updated on preventative measures. During the next ten days inspectors will review the sanitary state and veterinary protection of all Kuban pig farms. The farms that do not pass the inspection will be offered to change the field of work. Governor Tkachov also said that pigs in private households will be inspected and slaughtered if necessary with further compensation to the pigs owners. Yevgeniy Nepoklonov said that there will be one administrative body formed to fight ASF in Russia.
(Source, Krestianskie Vedomosti)

Quarantine in Krasnodarskiy Kray

The deputy head of Roselkhoznadzor, Aleksey Saurin, reported about the planned implementation of quarantine on the entire territory of Krasnodarskiy Kray because of numerous ASF outbreaks on pig farms in the region. Complete quarantine means a total ban on export of all pig-related products from the territory of Krasnodarskiy Kray and mandatory treatment of feed grain exported from the region. Grain traders of the region are not seriously affected by the ban as they export feed grain mainly to Middle Eastern countries where pigs are not bred and therefore importers are not afraid of ASF. So far, 54 quarantine posts were already placed on roads of Krasnodarsky Kray with veterinary officers examining all meat products and pigs transported from the region.
(Source, Furazh Online)

Imported Pork , Moscow Market

Poland

Smithfield Foods closes its beef operation

Animex the Polish subsidiary of Smithfield Foods is closing its beef abattoir at its main Morliny plant to concentrate on pork and is cutting 230 jobs of the 1,026 workforce. Animex is said not to be prospering on the tough Polish market. Furthermore, beef is a cheap export commodity in Poland and operators have razor-thin margins.
(Source, Smithfield Foods)

Czech Republic

Pork production still falling

In 2003, the country was producing 411,000 tonnes of pork. Last year, this had fallen to 263,000 tonnes. There is no end in sight as uneconomic units which are closing are not being replaced. Although pork represents by far the largest share of meat production with 52%, beef and poultry production are falling too.
(Source, Lidové Noviny)

Bosnia

Dutch investment

Van Genugten, the largest pig farmer in Holland, is building a large pig farm. The project is benefiting from EU subsidies and will use Dutch genetics.
(Source, Boederij Vandaag)

USA

Record pork exports to Japan

US pork exports for 2011 were up 20% on 2010 and could well exceed US$ 2 bn.
(Source, Pork Network)

Pork tenderloin gets heart-healthy approval

The American Heart Association has certified pork tenderloin as a heart-healthy food. Pork tenderloin is as lean as a boneless, skinless chicken breast.
(Source, National Pork Board)

Brazil

Pig meat exports subdued

Brazil's pig meat exports reached a seven-year low in 2011. According to data published by the Brazilian Association for pigs and exports (ABIPECS), pig meat exports totaled 516.400 t dead weight in 2011 which represents a decrease of 4,4% compared to 2010 and even a 15 % decrease compared with 2009 figures. The decrease is mainly due to difficulties on the Russian market. Following plant inspections the Russian authorities had banned imports from numerous Brazilian producers and in June 2011, all meat imports from the regions of Mato Grosso, Parana and Rio Grande do Sul were suspended. Russia lost its position as most important export market to Hong Kong where some 130.000 t of Brazilian pig meat were imported in 2011 – an increase of 30% compared with 2010 figures. Exports of Brazilian pig meat to Ukraine also rose significantly by 54% to 61.700t.
(Source, topagrar)